Publishing question: is an advance yours to keep or not?

Suppose an author receives a very generous advance on an unpublished book- $100,000 let’s say. Is that money his to keep even if the book does not earn back its advance, or- let’s say the book sells enough to earn back $75,000 but then stalls- does he have to refund the $25,000 when it goes out of print? Also, do paperback sales count towards an advance or is this something negotiated individually?

The reason I ask is that I’ve read horror stories about musicians who sold millions of copies but never earned back their advances and consequently were among the bestselling CDs/concerts of the year but essentially penniless and in debt to their label. I was wondering if this happens in publishing.

The advance is yours as long as you produce the book (or any book – E.L. Doctorow got an advance for a novel on the life of Edgar Cayce, but got Ragtime instead. The publishers didn’t mind. :slight_smile: ) The author is not asked for a refund.

(There was a case where Joan Collins was sued by her publisher to return an advance because the book tanked, but the jury said she could keep it.)

Advances are generally paid in parts: half on signing the contract, half on the delivery of an acceptable manuscript.

Paperbacks sales can be part of the original contract (and thus part of the advance) or can be negotiated separately (and get another advance).

I assume that a publisher wouldn’t advance that type of money unless the author was very well established. I would also assume that’s what you’re talking about. Also, most royalties are only 10-20% of the book according to my Novel and Short Story Writer’s Market Guide. I would think the author would have to pay it back or at least enough for the publisher to break even. But business is business and there are losses in business for customers and suppliers. Maybe there is an author on here that will know the definite answer.

As far as music, I read the book “All you need to know about the music business” and you are right on about that happening to musicians. The book claimed that, “after the dust clears and everybody gets their cut and the band pays back what it owes for recording and marketing, some musicians make about as much money as someone working at 7-11.”

Most bands make their money in live shows with Merch and Seating. But still, the promoter, tour manager, business manager talent buyer and venue all have to get their cut first as well.

The simple answer is you get to keep the advance. That’s why it’s better to get the money in advance instead of earning it in per book royalties.
If you get a 100k advance and your actual royalties per book total 75k, then you have a negative 25k balance with the publisher. If they follow with a paperback, then anything you earn on the paperback will be appllied to that negative balance before you get another check. But I’ve never heard of an author having to give back the advance, except in cases of fraud or just not delivering the promised manuscript.

A friend of mine had a novel published. His agent told him the good news over lunch. When my friend asked if he would be getting an advance, his agent said, “you’re eating it”. My friend gave me a copy. He also told me that he gave away more copies than were sold.:wink:

HAHA, Your friend got OWNED !

That’s very odd. Why would the agent sell the novel if he’s not getting any money out of it? Two possibilities come to mind:

  1. The agent took the money your friend should have gotten.
  2. (more likely) This was a vanity press publication (the sales info is a further clue). Possibly PublishAmerica.

There’s only one reason an agent would sell a book and not get an advance: the author paid him. Your friend has, at the very least, a terrible agent (how is this guy making a living?).

Actually, agent, friend, and I are all buddies. Agent would have never touched my friend’s book; did it just as a favor. :wink:

Well, the publishing company could also be a “mom and pop” operation, meaning they’re very small.

I suspect the real answer is read the contract.

I don’t know about returning the advance if you don’t deliver the book. Not selling enough copies is another matter. I had a chapter in a technical book, which was late (not because of me) and the field kind of died before the book got published. I got statements every quarter which were negative - more books were returned than sold. I didn’t have to return my pittance, though.

Usually agents don’t go to small presses like that: they make their living selling books, and if the publisher won’t pay, they’re better off offering it to someone who does.

Since the agent is a friend who is doing it for a favor, then it makes some sense. However, normally that would be a sign of a terrible agent.

Writers not producing books after an advance are more common than people think, but they are almost always handled quietly so nobody outside the industry ever hears of them. I can think of four categories the resolutions fall into:

The writer returns the money voluntarily. Not common, but not unheard of either.

The writer substitutes a different book for the one contracted. Often this will be a collection of some sort, anything enough to bulk out the covers and call a book. Usually the publisher accepts it as a loss to retain good will, but sometimes it’s the end of the relationship.

The writer defaults and the publisher eats the loss. Probably the most common. Used to happen more often in the old days, when publishers weren’t tiny parts of multinational corporations with profit and loss statements uber alles.

The publisher sues the writer to get the money back. Very rare, and not always successful. More likely to happen when they hand out big bucks to some celebrity who finds that putting the bad parts of a life in permanent print isn’t a good idea. A variant of this is a celebrity producing something so totally worthless - i.e. lacking the good parts - that it couldn’t possibly sell and the publisher won’t accept it.

Once the book is published, however, the advance is solid. Publishing is a crap shoot, in more ways than one. The vast, vast majority of books don’t earn back their advances. That’s why you see the blockbuster mentality that’s killing publishers and authors.

Softcover rights may be held by the publisher or sold to another publisher. In either case, the money brought in goes toward the advance. That’s true of every possible right, from audio books to magazine pre-prints to foreign sales to movie rights. Royalties do not begin to be paid out until the advance is fully covered.

In fiction, at least, the typical advance is quite small (anywhere between a few hundred and a few thousand, depending on all sorts of variables) and most books don’t earn out that advance anyway. The publishers know this and they budget for it as the cost of obtaining new material. If an author comes anywhere close to earning it out, the publisher will (ideally) have covered their own expenses with the actual profits. Unless sales are superlatively abysmal it won’t hurt the author much to not have earned out the advance unless their next book (or even two) also fails to sell reasonably and the bookstores start refusing to order anything with that name on the cover.

In the case of unknown authors suddenly recieving a large advance, it may be in order for that publisher to snap up someone they believe will be a valuable asset before another house does and perhaps provide incentive to sign a contract that commits the author to that publisher in some way. It’s also a good marketing point to the bookstores and industry press in it’s own right.

What kind of book did your friend “sell”, vetbridge? Fiction, technical, niche guidebook…?

I’m most familiar with the fiction publishing biz, where for some truly niche stuff there are super-small presses that offer a token advance and author copies, but most of the typical, established small presses generally offer at least a couple hundred dollars plus a somewhat generous royalty agreement, not that that would have worked to your friend’s favor. As far as I know, non-fiction tends to bring a higher advance but I’m sure that doesn’t extend to things like typical university publications or limited interest guidebooks (where the credit of having them in print at all is often seen as part of the reward).

The only completely accurate answer to this question is, “read the contract.” All of my contracts have required return of the advance if I didn’t deliver the book. I think that’s pretty standard, and I think the publisher would sue if you took their money and ran.

If the book is delivered, but doesn’t generate enough royalties to pay off the advance, that’s a different question (and again, it depends on the contract). An advance is technically a loan from the publisher so the author has something to live off of while writing the book. Any money that the publisher would pay the author gets deducted from the balance on the advance. That includes royalties, sale of movie rights, sale of paperback rights, international deals, and so forth. If the author gets a $100K advance for a book, s/he won’t be seeing another penny on the book until the advance is paid back.

When you’re talking about an advance that big, the publisher has a lot of confidence in the book. The statistic I saw years ago said the average advance today is under $7,000. From what I’ve seen lately, I’ll bet it’s even smaller than that (got any more recent numbers, Exapno Mapcase?). Once a book has generated $75K in royalties, it’s had a heck of a run. The publisher will try to generate the extra money through remainder sales (which usually don’t generate any income to the author) or selling all or part of their rights to the book. If a book does that well in hardback, you can just about guarantee there will be a paperback.

Either way, even if the contract allows the publisher to collect back the unearned portion of the advance, it’s unlikely that they’ll do it. It simply isn’t worth the court costs and the ill-will. Would you take your book to a publisher that had just sued a big-name author for unearned advance money?

It was fiction.

I have another acquaintance who “self published” a textbook. He basically paid for it to be printed, and bought hundreds of copies. He teaches a course where the book is “highly suggested”. Owning the book can easily make a letter grade difference for the student, so most people buy it. He sells it for just shy of $100 (last I knew) and he sells around 100 copies a year. I own a copy, and it is actually an excellent text for the field.